Vote Motive, Profit Motive, And Arundhati Roy

Arundhati Roy’s latest raises questions about Democracy – very “Hoppean questions,” as the LRC blog put it. Consider this extract:

What we need today, for the sake of the survival of this planet, is long-term vision. Can governments whose very survival depends on immediate, extractive, short-term gain provide this? Could it be that democracy, the sacred answer to our short-term hopes and prayers, the protector of our individual freedoms and nurturer of our avaricious dreams, will turn out to be the endgame for the human race? Could it be that democracy is such a hit with modern humans precisely because it mirrors our greatest folly--our nearsightedness?

Public choice theory has long ago analyzed the “shortsightedness effect” in government policy-making in a liberal democratic setting: that is, how governments invariably choose to spend on projects whose short-term benefits are high, even if their costs are also high, while never spending on projects whose benefits are in the future. Indeed, even without this theory, common experience tells us that politicians do not think beyond their terms.

How then do we get the “long-term vision” that Arundhati Roy is seeking? Note that “central planning” is based on ideas of a “collective long-term vision,” and the key quality such a planner is supposed to possess is the ability to see ahead. Roy admits that these planners and their democracy have failed to think ahead.

How do free societies think ahead? How do free societies provide for the future?

In a free society, the critical function performed by entrepreneurs is “provision for an uncertain future.” You get everything “on demand” in free markets only because entrepreneurs have planned ahead, trying to successfully guess your needs, and provided for them. It starts raining, and – lo and behold – the nearest shop stocks umbrellas. A sudden thirst hits, and the very first shop you come across stocks cold drinks and mineral water. In Goa, you’d get a beer too – but Delhi is quite different because The State monopolistically sells beer here, and cannot perform this function as well as free entrepreneurs would have.

There is a lesson in this: that a society governed by Private Property and Free Exchange is best able to provide for the future and also husband scarce resources – because it provides each individual with incentives to do so. In such a society, individuals think far ahead, and even provide for their succeeding generations. Under socialist planning, especially if accompanied by inflationary finance, there is “capital consumption” and consequent “de-civilization”: the future becomes bleak.

Of course, Roy would not agree, for she hates the idea of free markets and free enterprise violently. She says:

What happens now that democracy and the free market have fused into a single predatory organism with a thin, constricted imagination that revolves almost entirely around the idea of maximizing profit?

Actually, the profit motive is an innocent motive, for at its root lies the desire to serve the consumer better than the competition.

The real ugly motive is the Vote Motive – the title of Gordon Tullock’s 30-year old primer on public choice. Arundhati Roy should read this little book to understand the flaws in liberal democracy. She will then obtain insights by which to analyze the predatory nature of our socialist democracy. Download a free pdf here.

For social order we need Law. For survival in free society we need free markets. For thinking ahead and providing for the future we need entrepreneurs.

Where does “democracy” fit in? At least, in India, we all know that the real outlaws are the politicians and their henchmen. They contribute to social disorder, they ravage the public treasury, they contribute nothing of worth. They are invariably tax parasites.

Compare these parasites to any entrepreneur – someone who satisfies your needs.

What a world of difference between the Profit Motive and the Vote Motive.

I hope Arundhati Roy gets that.